Actionable insights — Portfolio Update June 2026

2:38 1. Run a temperament check before you act in a drawdown

1. When the portfolio is falling and you feel fear/frustration/the urge to "look good," don't go numb to the emotion — but don't act on it either. Pause.
2. Ask whether a legendary long-term investor (Buffett/Lynch/Munger) would tell you it matters that you beat the index this YTD period. If not, the urge to change strategy is the emotion talking.
3. Only then return to the fundamentals and decide. Reaction speed is the enemy; control over the reaction is the edge.

• An urge to switch into whatever's outperforming; a need to "look good every week"; selling at a low to buy what already ran — the exact Magellan-investor error.

26:06 2. Diagnose the drawdown — multiple compression vs a weakening growth engine

1. Decompose the decline: is the price down because earnings/growth are deteriorating, or because investors are paying a lower multiple for the same (or better) earnings?
2. Quantify it — back out the implied multiple change from your aggregate earnings growth vs the price move (he maps ~−8% price on a flat engine to ~−20% multiple compression).
3. Multiple compression on a healthy engine is "far less alarming" and self-correcting; deterioration in earnings/moat is the one that demands action.

• Earnings rising while price falls; a forward P/E that keeps dropping purely on growth; no change in the underlying revenue/EPS trajectory.

29:19 3. Build a look-through table and track "earnings power owned"

1. Collapse the whole portfolio into one synthetic company: weight each holding's revenue/EPS growth by its position size to get a single blended growth rate.
2. Sum the actual earnings your shares own — the dollar EPS attributable to your holdings — and project it forward a year.
3. Judge health on these aggregate, price-independent numbers; if the blended engine grows faster than the S&P (~9–10%), the book is fine regardless of quotes.

• A blended growth rate above the index; rising owned-EPS year over year; the gap between that and the price is your margin of safety.

47:14 4. Stress-test each moat three ways — and act only when the moat, not the price, deteriorates

1. For every holding, ask not "are earnings up?" but "is the competitive moat getting wider or narrower?" — earnings can rise right up until a business is disrupted.
2. Triangulate: get an AI model's objective read, write your own independent take (disagree where you have an edge), and cross-check a third party (Morningstar's moat trend).
3. Reserve portfolio changes for names where the moat is genuinely impairing — "if a lot of the moats were getting weaker, I'd be changing positions."

• A holding where two of three reads say the moat is narrowing; a number that's rising only because disruption hasn't bitten yet (the BlackBerry pattern below).

17:03 5. Anchor to the earnings-follow-price rule; treat detachments as buys

1. Judge a holding by where its earnings-per-share will be in 5–10 years, not by money flows, headlines or momentum.
2. Accept that price and EPS are ~100% correlated long-term but detach short-term (usually <5 years, at most ~10) when investors price in a future EPS change.
3. When EPS keeps compounding but price has detached downward, that gap is the opportunity to buy — because cheapness eventually attracts buyers and "overwhelms negative stories."

• A quality name where EPS is rising but price is flat/down; a forward multiple compressing purely on growth; a "bad aura" narrative detached from the numbers.

48:04 6. Don't trust rising earnings alone — test for the BlackBerry trap

1. Remember that reported earnings can keep climbing for years while a moat is being hollowed out by a new technology.
2. So pair the raw-numbers check with a subjective disruption question: is anything structurally able to cut into this company's earnings power soon?
3. If the numbers are strong but the moat is being newly contested, downgrade conviction even before the financials roll over.

• A new entrant/technology that lowers the barrier to a holding's core product (e.g. AI vs DUOL); strong trailing numbers masking an eroding moat.